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  FEATURE
Apple's 99 cent store
How under-priced games are ruining the iPhone
Product: iPhone | Publisher: Apple

When something seems too good to be true, it usually is. The dozens of cheap games lining the digital shelves of the App Store appear to be a bonanza for iPhone gamers. Snatching up high quality titles like Topple and Flick Fishing for pennies can only be a good thing. Yet there's more than good value driving down the price of iPhone games. A highly competitive market is giving rise to unexpected problems that threaten to undermine affordability and game quality.

During the first few weeks of Apple opening business on the App Store, pricing was variable. High profile games such as Super Monkey Ball and Tetris launched with exorbitant $9.99 price tags. SEGA saw strong sales despite the high price, but competing games suffered. Tetris, along with a slew of other titles, were forced to drop in price to court downloads. Super Monkey Ball succeeded thanks to prolific promotion by Apple. Price had been a hurdle for those games without as much marketing, prompting a downward shift in pricing.

This, of course, was reasonable. Many of these preliminary games had been overpriced, particularly those that had been ported from mobile and then jacked up for an iPhone debut. Consumer backlash against these games led to a natural adjustment in the market. That signaled a healthy shift instigated by consumer demand and expectation. Most iPhone games shouldn't top $4.99, with a select few deserving a higher tag. Compilations, anthologies, and triple-A games can justifiably cost more. One-dimensional arcade knock-offs and episodic content, on the other hand, can't.

Unfortunately, the downward pricing trend has become a spiral. Games across the spectrum of quality have been forced to take lower prices in order to compete with a sea of titles. What was a blue ocean only four months ago has become a blood bath. Developers are scrambling to make games profitable in the face of hundreds of competitors.

Topple, for example, is a quality game that carries the same low price tag as the disappointing Cosmic One and Radius. Half a dozen Space Invaders clones cost more than ngmoco's brilliant first effort, which has the detrimental effect of junking up the market. ngmoco can't charge any more than 99 cents for Topple because it would get buried. The fact of the matter is cheap games sell. Had Topple been $1.99, it would likely have underperformed in comparison to lower quality games simply because of price.

There's good and bad news out of this. First, the good news: quality games are receiving the attention they deserve because they're cheaper than ever before, so people are grabbing them. The bad news, however, is that it's creating an unrealistic expectation that these quality games should always be inexpensive. Reality dictates this business model won't last because the cost of developing triple-A games isn't supported by a 99 cent price point. Developers can't make Kroll for 99 cents, yet iPhone consumers are demanding it.

In order to reverse this alarming trend, some developers have resorted to temporary price drops to spur sales. The objective is to sell a bunch of copies in order to land a spot on the coveted top 25 list. A poor store front means this is the only viable way of getting exposure on the App Store. Unfortunately, this causes massive instability in the market and angers consumers with constant price fluctuations.

Apple needs to take leadership and inject stability in the App Store, but it won't. As such, it rests on developers to take measures to compete in a sustainable manner. Chief among these measures has to be fair pricing. If you're creating a bold experience, give it a $4.99 price point; if your game is a Breakout clone, don't charge more than 99 cents. Fair pricing will bring a much needed sense of balance to the store that is fundamental to its future.

Second, developers need to aggressively market their titles other than by trying to land on the App Store top 25. The notion that there aren't marketing avenues on iPhone is rubbish - there are plenty of options available to promote a game. Advertise on popular handheld gaming websites, work to get exposure via interviews, previews, and reviews, launch a website for your game - these are just a few. You're out less money by doing these than you lose by dropping the price.

Consumers share in the burden too. Be prepared to spend an extra dollar or two for a game that deserves it. Don't reward crappy knock-offs and clones that carry an unjust price. As with any retail front, speak with your dollars, vote with your cents. Change, literally, is what we need here and it has to start from the ground up.


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Reviewer photo
Tracy Erickson 11/11/2008
Have your say!  
Joined:
Oct 2006
Post count:
683
splat | 11 November 2008
Too true. Unless the likes of EA and Ubisoft get into the App Store and start enforcing $10 pricepoints, iPhone's going to be dead for commercial developers by 2009. Will be interesting to see what Warners does with LEGO Star Wars.
Joined:
Oct 2007
Post count:
105
vaga222 | 11 November 2008
Oh come on, if the market decides 99c is the price point for iPhone games then that's the price point games should be sold at. Maybe we should find a way of stopping ad funded games because they are teaching people games should be free?

As you suggested they should start to do some more marketing if they are serious about charging more money but to impose a price on publishers is just crazy. Apple would then have to price games based on arbitrary rules which would cause developers to get frustrated.

Finally, having the distributor give bias to certain companies while essentially blocking others from getting exposure sounds a hell of alot like the current mobile market and I thought we had grown away from that model for very obvious reasons.

Joined:
May 2007
Post count:
387
MattyLion | 11 November 2008
I'm caught between a rock and a hard place with this argument, I'm a fan of the free market principle the App Store is modelled on, but I agree that too much poor quality gaming is killing the thing for everyone. It's getting impossible to find a good game to play, although I'm sure there are plenty out there. The very beauty of the App Store is becoming its own horrific downfall.

I don't think EA and the like have a divine right to be featured content, especially as I couldn't give a rats ass about another Tetris release, but instead quality gaming regardless of publisher needs to float to the top somehow.

Even the ratings system proves unreliable, so many stupid comments and 1* ratings, we need a "was this review useful?" system to factor the review scores higher.

I'm not sure we can blame the App Store's front-end or free market principals, it is after all US who've ruined it!
Joined:
Dec 2006
Post count:
152
stuartdredge | 11 November 2008
I think the problem with the App Store is that there's lots of rubbish, and the tools to find the good stuff aren't quite sophisticated enough yet to deal with that.

But I think the fact that there are real gems to be found for free or less than a quid is a good argument for not making the store any less open to developers. I've been playing games like Trace, Jelly Car and Aurora Feint, to name but three, and they were all freebies.

So yes, keep the App Store as open as possible, but beef up the search tools! Amazon manages the process of finding the best books/products from a huge catalogue, so it can be done.

Loved this article though, it's good to see these issues being talked about properly.
Joined:
Jul 2008
Post count:
17
tobor | 11 November 2008
Sadly, instead of the iphone being the saviour of mobile phone gaming the it could prove to be the death.
99c a game?, even if a game sells 100,000 units your'll be lucky to get back 30K, hardly worth the risk developing a decent game for that. So all we will end up with is bedroom coded tat and the same quality issues thats plagued all traditional phone games markets. But at least it'll stop the big publishers overcharging for knocked out convertions of stale IP.
Joined:
Nov 2008
Post count:
5
nanokiwi | 12 November 2008
I find this article annoying. Where is the data to support your assertions? If I recall correctly in the early days consumers on the forums and reviews complained voraciously how so many games were overpriced. Supply of games drove down the price of B grade and below releases to 99c. That does not mean that there is no market for higher priced games, though they will not sell unless they are higher quality. With 12 million potential customers there is money to be made at the lower and higher ends of the market. True though, we don't quite have the tools to separate the wheat from the chaff with so many games coming to the market, but I think web 2.0 is up the the challenge.
Joined:
Sep 2008
Post count:
8
indyraider4 | 12 November 2008
they need to make something called the premiere section of the app store. what you do is each person can vote on an app once and after it reaches a certain amount it goes premiere. then all apps they submit goes premier automatically. maybe it needs tweaking, but you get the concept, right? any other solutions would be great. post yours now!
Joined:
Oct 2006
Post count:
683
splat | 12 November 2008
The history of capitalism proves that - over time - quality improves and prices drop when producers can make a decent profit on their goods and services. If a system for whatever reason - price controls, incompetence, lack of size - can't support profit then producers will make a product for another market. Both iPhone and N-Gage are for very different reasons are currently broken systems, but at least Nokia seems to want to fix its system. I don't think Apple gives a toss.
Joined:
Nov 2008
Post count:
2
goldenboat | 12 November 2008
It has been in Apple's interest to build up the quantity of offerings on the App Store as rapidly as possible to convince consumers that it is a good idea to buy an iPhone. As the iPhone installed base grows, I expect we will see Apple look more critically at the quality of the Apps on offer. I also expect we will see significant revision to the App Store interface to improve the browsing and buying experience. We aren't yet at the point where Apple needs to intervene on behalf of developers. ngmoco has plenty of money to market Topple if they aren't satisfied with sales.
Joined:
May 2007
Post count:
387
MattyLion | 13 November 2008
Agreed goldenboat, well put.

My only concern about the "history of capitalism" and "free market" talk is that it can take years or even decades for the market to settle and mature, Apple doesn't have that long!

I'm sure they'll step in now they see the financial promise of this side of their business.
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